This month, the healthcare community that transacts e-commerce through the GHX exchange is reaching a significant milestone: $50B in healthcare purchasing transactions in the current 12 month period. Why is this important? Simple: because electronic transactions are less expensive to process than manual (phone or fax) transactions, and transactions through GHX are less expensive to process than even traditional EDI. You may have heard mention (just on rare occasions) that healthcare needs to reduce costs. Today, GHX customers are significantly reducing costs without any negative impact on patient care. In fact, electronic business is having positive impact on patient care.
With public and private finances squeezed and austerity measures adopted across all major country markets, healthcare organisations across Europe are facing pressure to increase efficiency in the supply chain. This pressure acts as a catalyst, speeding up the pace of change towards a sustainable healthcare system.
2012 in Review
The Canadian healthcare marketplace has undergone a multitude of changes in recent years and 2012 was no exception. As federal and provincial governments, providers, suppliers, GPOs and the providers of care work toward a common goal - high-quality healthcare delivered in a cost-effective and sustainable manner – all players are compelled to re-examine their roles and activities related to rising healthcare costs and make changes for the common good.
Earlier this fall, we announced the initial results of our implantable device supply chain (IDSC) pilot projects. The participating suppliers and providers are leading the charge to reduce the enormous amount of waste that stems from the IDSC – $5 billion a year across the industry. I am not going to take you through a history of the IDSC or our pilot; as readers of the “Healthcare Hub,” you know there are countless resources available here on those topics. What I’d like to share with you are some high-level best practices that we uncovered with our pilot participants; ones that I think can help any healthcare organization that is thinking about how it automates and manages the implantable supply process.
In late August, I posted a blog entry about Cook Medical's advertising campaign, announcing that it had fully adopted the GS1 standards, including assigning Global Trade Item Numbers (GTINs) to all of its products. At the time, I asked the question, "Does Cook Medical see standards as a competitive advantage?"
Late last week, GHX reached an exciting milestone. The ticker on our homepage, which tracks how much money GHX customers have saved by transacting business through our exchange, reached the $2.5 billion mark! We are now more than halfway to our goal of taking $5 billion out of the cost of healthcare in five years.
It’s that time again – time for year-ahead predictions. Making predictions for the healthcare space is nothing new for us. In fact, I think we did a pretty good job calling some major industry trends last year. If you want to hold me to that, you can read more about them here.
Just a little over a week ago, the comment period on the FDA’s proposed UDI rule closed, and now it is up to the FDA to sort through the 300 plus comments received, with the goal of publishing a final rule by next May – or at least that’s when the FDA Safety and Innovation Act (FDASIA) says it needs to be published. But if that wasn’t enough to fill up the FDA’s holiday reading list, the agency today opened up another comment period, this time for 30 days and specific to a newly published list of devices that would need to comply with the regulation within TWO years after the final rule is issued.
If you’re a regular reader of “The Healthcare Hub,” it won’t come as any surprise to you that the current state of the implantable device supply chain (IDSC) is severely flawed. You also know that the healthcare industry loses billions of dollars a year due to technical inefficiencies, lack of visibility and plain-old human error within the IDSC.
So here we are, folks … Nov. 7, 2012. The year has been filled with political chatter, fierce debates (among the candidates, pundits and probably your friends and family too) and uncertainty over the direction of our country. The topic that has been front-and-center throughout the election was healthcare – and what a polarizing issue it is. "Healthcare reform will bankrupt the country," "Obamacare is the best thing since sliced bread," "I don’t want to pay for other people's healthcare." The New York Times even said, "this election is, to an important degree, really about Medicaid," and I couldn’t agree more.
A few years back, I was asked to speak at a business school panel about the most significant changes that have happened in the business world since I graduated. After I moved past the obvious changes in my waist and hair line, I talk about things like China and how it has transformed from not only a source of low-cost labor, but to an intellectual property driver and producer of high-quality, low-cost products. It is fascinating how things change – and the rate in which it happens.
At the Healthcare Hub, we’ve written frequently about the amount of waste in the implantable device supply chain (IDSC). An estimated $5 billion in losses each year is nothing that can be pushed under the rug. Providers and suppliers need to act now to get a handle on these loses, and utilize the two potential solutions that they have at their fingertips – collaborative strategies and technology – to shift the status quo.
I’ve always been a big online shopper, and now that I can receive automatic text messages when my orders are shipped and delivered, I must admit, I do most of my gift selecting and giving on Amazon.com (admittedly, late at night, while on the road for business). This is not meant to be a commercial for Amazon, but rather to point out how accustomed I have become to being notified re: the status of my orders. I don’t have to go looking for the little piece of paper with the tracking number or remember which carrier I used. Amazon manages that information for me and sends me text alerts when the product has been shipped and when it has been delivered. There is great comfort in knowing that a package has made it in time for a niece’s or nephew’s birthday.
Yesterday, the European Commission, as expected, issued a draft directive that includes creation of a unique device identification (UDI) system.
I just returned from a meeting of the provider and manufacturer advisory boards working with GHX to create an industry solution to the challenges faced in managing implantable devices. You know, I love it when a plan, or more importantly, an industry comes together. The combined advisory board, which includes some of the most well-known and respected organizations in the worlds of cardiology and orthopedics, are tackling this problem from all sides: clinical, operational and financial. Working with organizations like this – and seeing how they are working with one another and aligning internal functions - gives me hope that we truly can transform healthcare in a meaningful way.
It was down to details – and you know what they say about who’s in the details – at the UDI Conference Summit in Orlando this week. With the publication of the proposed UDI rule in July, this year’s conference was, not surprisingly, packed, mostly with global manufacturers. In fact, when Jay Crowley - senior advisor on patient safety for the FDA’s Center for Devices and Radiological Health –the FDA’s point man on UDI – asked who was in attendance, only one manufacturer said it was focused solely on the US market. That means the rest of them have to prepare not only for the US final rule, expected out next spring, but also comparable regulations in other countries. The European Commission is expected to issue its draft UDI directive this fall. But this week, it was all about the U.S.
With some hospitals, real innovation permeates through different areas of the organization, whether it is clinical, operations or IT. This is the case with U.S. News & World Report’s Best Hospitals’ Honor Roll for 2012-2013, in which 16 of the 17 ranked providers are GHX customers. Not only do these organizations demonstrate excellence in patient care, but they demonstrate innovation with their healthcare supply chains – a critical and often-overlooked component for lowering costs and improving patient care.
There was more evidence this week that suppliers recognize the value in helping hospitals and healthcare systems become better customers. In fact, some are even willing to pay for it, a point that has not gone unnoticed by some savvy healthcare providers.
This week marks the seventh annual National Health IT Week. Admittedly, in years past, I’ve felt this week was overly focused on very specific areas of healthcare IT, most notably electronic health records (EHRs). But this year is different. With the passing of healthcare reform, in addition to a general, industry-wide call to action for lowering costs and improving patient care, this week seems to have taken on a much broader level of significance within the healthcare community.
The FDA’s preliminary report on "Strengthening Our National System for Medical Device Postmarket Surveillance, posted last week on the CDRH website, points out the value of sharing data and technology, while leveraging existing resources, a theme common to how medical device manufacturers and healthcare systems are approaching the development of an industry solution to automate the implantable device supply chain.
Are standards finally getting the attention they deserve? Cook Medical probably hopes so. Check out pages 54-55 in the August issue of the Journal of Healthcare Contracting, where the Indiana-based medical device manufacturer uses a two-page advertising spread to announce that it has fully adopted Global Trade Item Numbers (GTINS). This represents a shift in messaging around standards, from primarily providers and GPOs demanding that their customers and business partners use the standard identifiers, to a manufacturer making standards adoption part of its differential advantage.
If you need proof that increased partnerships and collaboration in the healthcare supply chain mean business, take a look at how many times these topics are showing up on the agendas of healthcare conferences these days. I just returned from the 2012 AHRMM Annual Conference and Exhibition, where the topic of collaboration was featured in no less than four learning labs and discussed by physicians, supply chain executives and academic experts alike in the general sessions. I had the pleasure of moderating a session on "Driving Out Costs through Collaboration," where both providers and suppliers engaged in a provocative but constructive discussion on how to reinvent relationships between providers, suppliers, physicians, payers, and patients to take cost and risk out of the healthcare system. A key point raised in this discussion, as well as in a general session on healthcare reform and the supply chain earlier in the day, was that suppliers generally don’t have a good understanding of how their customers’ worlds are changing. Executives do, for the most part, but not those on the front lines, and those are the individuals who have the most interaction with their customers.
The FDA’s proposed UDI rule issued last month continues to garner a lot of interest. I want to thank Jenny Laurello, blogger for SearchHealthIT’s networking portal, The Health IT Exchange, for giving me the opportunity to provide a guest post on the topic this week. I hope you will take a look and join in the conversation. As with so many things in healthcare these days, it is going to take a concerted and more importantly coordinated effort across the entire healthcare value chain if we are going to achieve better quality care at a more affordable price. The UDI is not a panacea, but it is a step in the right direction, but only if we all step together. Otherwise, we run the risk of simply adding to the regulatory burden without realizing the intended benefit.
I’ve had the chance to speak with a number of reporters and editors over the past couple of weeks, ever since the FDA’s proposed Unique Device Identification (UDI) rule was issued. Surprisingly, but in a pleasant kind of way, most of their questions were around how the rule will impact hospitals and other healthcare delivery organizations. Surprising, because the UDI rule in and of itself will not put any regulatory requirements on providers. Pleasant, because it demonstrates recognition that if providers don’t use the unique identifiers, much of the intended value of UDI will be lost.
Last week, the Healthcare Hub featured a post on what suppliers need to do to get ready for the pending unique device identification (UDI) regulation. That rule will require medical devices to bear labels with unique device identifiers and for manufacturers to populate data about those products in an FDA database. Today, Mike Gillespie with GHX Business Solutions joins the conversation with a guest blog based on his experience working with suppliers to prepare for UDI and global data standards.
There was more movement in Washington this week related to the pending regulation requiring unique device identification (UDI) of medical devices. Yesterday, the proposed UDI rule, along with all the references and attachments, was published in the Federal Register, which starts the clock ticking on the 120 days during which interested parties can provide comments on the proposed rule. At the end of that comment period, the FDA has six months to publish the final rule, under a deadline included in the FDA Safety and Innovation Act (aka the FDA user fee act), which the President signed this week.
Earlier this week, the U.S. Food and Drug Administration (FDA) at long last issued its proposed Unique Device Identification (UDI) rule, which requires creation of a system that can uniquely identify medical devices through distribution and use. In order to comply with the regulation, manufacturers will need to place unique identifiers on the labels of their devices and provide additional data on those products for a UDI database (UDID). In the second post in this series, we will focus on what suppliers need to know and do to get ready for UDI.
This morning, the US FDA issued its long awaited proposed rule for Unique Device Identification, which will require medical devices to be labeled with unique identifiers. Click here to read more and subscribe to email alerts.
During the June meeting of the GHX Global Data Standards Users Group, Indira Konduri with the FDA’s Center for Devices and Radiological Health shared a cartoon that depicts how many of us have felt about the status of the proposed Unique Device Identification (UDI) rule. In the cartoon, a student asks his teacher, "When can I stop making wild guesses and start making educated guesses?" Well, that time is now. Last week, in a rare display of bipartisanship, Congress sent a bill to the president’s desk that will require publication of the proposed UDI rule by the end of the year. That rule will require manufacturers to uniquely identify their devices through distribution and use. The FDA Safety and Innovation Act also requires the final rule to be published within six months after the close of the comment period on the proposed regulation and, more importantly, for "devices that are implantable, life-saving and life-sustaining" to bear the unique identifiers no later than two years after the regulation is finalized.
The US Supreme answered the question about the constitutionality of the Affordable Care Act (ACA) today, but despite all the hoopla, the ruling did little if nothing to address the more pressing question: How to lower the cost of healthcare, without sacrificing quality. With the presidential election season in full swing, I do not expect the political wrangling over healthcare reform to go away. If anything, it will likely heat up, with opponents now focusing their attention on the November elections. In the meantime, while the political battles rage, those directly involved in healthcare are busy fighting the real war.
Washington, DC, which is anything but a bastion of certainty around healthcare these days, handed medical device manufacturers a bit more clarity last week around the timeline for the unique device identification (UDI) rule. Congressional negotiators retained language in the reconciled FDA user fee act that would require publication of the proposed rule by the end of the year. The bill also requires the final rule to be published within 6 months after the close of the comment period on the proposed regulation and, more importantly, for “devices that are implantable, life-saving and life-sustaining” to bear the unique identifiers no later than two years after the regulation is finalized.
When I met with Gartner’s Fabrizio Biscotti earlier this year, he told me that “cloud computing” has been the #1 search term on Gartner.com for the past three years; it was also in the top 3 on the technology priorities list for CIOs in 2010, 2011 and 2012, up from #16 in 2009. Those statistics span multiple industries, but the cloud is certainly a topic of conversation at many of the healthcare industry events I attend. It’s not surprising, given the need for healthcare organizations to create more collaborative networks through which they can coordinate the care of specific populations. Computing and storage technologies delivered in the cloud also help meet two of healthcare’s biggest challenges: the need to deploy new capabilities rapidly without significant capital investments.
After working with him for nearly a decade, I finally had the chance to meet Gartner’s lead master data management analyst, Andrew White, in person today. He kicked off the "Big Data" track at the 2012 GHX Supply Chain Summit, helping the audience get some perspective on what can be an overwhelming subject for many. Andrew said, "it’s not really about the data," but rather the business objective you are trying to achieve. It seems like an obvious point but one that is often forgotten when we are too focused on the challenges around data created, stored, shared and used in healthcare. Think about electronic health records (EHRs) as an example. Many healthcare systems have been so focused on meeting the requirements of meaningful use in time to qualify for federal funding that they forgot to consider whether their systems would communicate with EHRs deployed by other providers. And isn’t a primary purpose of EHRs to make sure that providers responsible for specific patients have the ability to share information in order to better coordinate care for those patients?
I am in Sydney, Australia for the GS1 Global Healthcare Conference, which convened this morning. Arriving over the weekend, I had the opportunity to tour the Sydney Opera House. I was struck by the story of how the shells that comprise the famed design of the complex were constructed. The story holds a lesson for those of us working to increase standardization in healthcare, whether it be the adoption of data standards or more standardized processes.
The proposed rules for meaningful use stage 2 were finally published in the Federal Register last night, albeit AFTER the keynote address by National Health IT Coordinator Farzad Mostashari, M.D. at the HIMSS 2012 conference in Las Vegas yesterday morning – just further testament to the fact that Washington does not always meet its deadlines. (Oh, wait, is that a surprise?)
Later today, I will climb on the plane and fly to Las Vegas to join 20 to 30 thousand of my colleagues in healthcare IT for the 2012 HIMSS Annual Conference and Exhibition. Sadly, once again this year, the role of the supply chain in meeting some of our most critical clinical and financial challenges in healthcare reform is absent from the agenda - with one notable exception. An impressive group of experts – from medicine and technology (including EMRs, clinical documentation, RFID, and system integration) will meet Wednesday afternoon at HIMSS to discuss the problems associated with inaccurate and incomplete clinical supply documentation at the point of use.
There’s been plenty of news about implantable medical devices in recent weeks, but unfortunately, the coverage has been fairly limited in scope (focused primarily on price), which, in my opinion, fails to address the more important issue: how do we manage the use of these devices in a manner that helps deliver quality care in an affordable manner.
I have been pleased to see a number of reports, news releases and blog posts recently about the value of cloud computing in healthcare. One of my favorite bloggers, Tom Finn, with Healthcare Matters, recently wrote about the value of cloud-enabled supply chain management, noting “it’s not a matter of ‘if,’ but rather ‘how’ healthcare providers are going to implement ‘cloud computing’.” Tom also referenced a recent KLAS news release that says 71 percent of providers are deploying or plan to deploy cloud technology. All good news, but I have a concern. In both pieces, and I would argue in most cases, the cloud is being viewed too narrowly in healthcare.